Infonetics reports L2-L7 LAN switch revenue totaled $3.8B in Q4, down 2% from 3Q04, but up 22% from 4Q03 and up 24% between 2003 and 2004

February 22, 2005

3 Min Read

BOSTON -- Worldwide L2-L7 LAN switch revenue totaled $3.8 billion in 4Q04, down 2% from 3Q04, but up 22% from 4Q03 and up 24% between 2003 and 2004, according to Infonetics Research's quarterly market share and forecast service, "L2-L7 LAN Switches."

Worldwide L2-L3 Ethernet switch revenue made up the lion's share of the LAN switch total, dropping 3% from 3Q04 to 4Q04 to $3.6 billion, while ports dipped 1% to 61 million. Between 4Q04 and 4Q05, L2-L3 Ethernet switch ports and revenue are projected to increase 7% and 2%, respectively.

"It's been a good year in the LAN switch market," said Matthias Machowinski, directing analyst at Infonetics Research. "Sales of Gigabit switches drove the market significantly higher, and, on a yearly revenue basis, are finally outpacing those of 10/100M switches. Cisco continues to have a stronghold on the overall market, especially in the chassis segment. But Cisco has been steadily losing fixed configuration port market share over the last year, against competitors like NETGEAR and D-Link."

The worldwide total for L4-L7 switch/load balancers reached $165 million in 4Q04, a 9% increase from 3Q04, driven by sales of chassis-based devices. For the fourth quarter in a row, revenue for L4-L7 switch/load balancers with SSL registered double-digit growth, increasing 22% in 4Q04 to $70 million, and is expected to jump another 11% by 4Q05.

Market Highlights

  • Cisco leads the worldwide L2-L3 fixed configuration switch market, with 56% revenue market share and 29% port market share in 2004; revenue share is up and port share is down from 2003

  • 3Com is second in worldwide L2-L3 fixed configuration switch revenue share in 2004, with significantly improved port share (fourth overall), while NETGEAR remained second in worldwide port market share and sixth in revenue market share

  • Cisco is the worldwide leader in L4-L7 switch/load balancers without SSL in 4Q04, with 44% revenue market share and 43% port market share

  • F5 continues to cement their lead in the L4-L7 switch/load balancer with SSL category, with 54% revenue and 56% port market share in 4Q04, in the face of strong competition from Cisco and Nortel

  • Fixed switches represented 40% of total L2-L3 switch revenue in 2003 and chassis switches represented 60%; now the split is 45% and 55% respectively, shifting to 50-50 by 2008

  • 46% of 4Q04 L2-L3 Ethernet switch revenue was from North America, 33% from EMEA, 19% from Asia Pacific, and 2% from CALA

Infonetics' L2-L7 LAN Switches report tracks layer 4-7 switch/load balancers with and without SSL, and layer 2-3 Ethernet switches, broken out by fixed configuration, and chassis switches in 100M, 1G, 10G, and PoE speeds. Forecasts are updated quarterly and cover North America, EMEA, Asia Pacific, CALA, and worldwide. Companies tracked in this service include 3Com, Alcatel, Allied Telesyn, Avaya, Cisco, D-Link, Enterasys, Extreme, F5, Foundry, NETGEAR, Netscaler, Nortel, ProCurve (HP), SMC, and others.

Infonetics Research Inc.

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